AUSTRALIA 
Jitters over Federal budget surplus
Friday, 9 May, 2008
The federal government is reportedly providing $31 billion of tax cuts in next week's budget. (AAP)
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Independent economic forecaster Access Economics says the Labor government must deliver on its promise of a tough budget, or home buyers face even higher interest rates.
The economic forecaster says while the Rudd government kicked off its campaign in fine style last November, it has several tough decisions ahead.
It points to the $31 billion of tax cuts, bonuses for carers and seniors, more money for health and the Murray Darling Basin.
Baby bonus review
Meantime Finance Minister Lindsay Tanner says the tax cuts announced in the lead up to last year's election will insulate people on middle-to-high incomes from the impact of budget cuts.
He believes people on high incomes will be getting significant tax cuts, but says it's inevitable spending cuts to be announced in the federal budget will cause pain in various sectors of the community.
The baby bonus has also come under the spotlight in recent times, with Mr Tanner refusing to speculate on whether Tuesday night's budget will include means testing of the baby bonus.
The bonus rises to $5,000 on July 1, the same day the first roll out of Labor's promised $3 billion in tax cuts comes into effect.
Surplus targeted
The government is targeting a budget surplus of at least 1.5 per cent of gross domestic product (GDP), by cutting government spending to help fight against inflation.
While in Opposition, Labor earmarked $10 billion of cuts for the next four years, but also said it's aiming for another three or four billion dollars worth of cuts.
Mr Tanner told the media it's very important to get a balance, and the government doesn't want to go overboard.
Focus on education
Meanwhile the Rudd government says it's first budget will cut growth in real spending next fiscal year, but lay down a framework for infrastructure and education.
Treasurer Wayne Swan says the strategy is designed to respond to the immediate inflation crisis, but deliver on commitments to expand the nation's economic capacity.
It's been revealed the budget will contain 649 individual decisions on spending cuts, and re-prioritised spending initiatives.
The treasurer made it clear the measures to invest in skills and infrastructure will have to be phased in over time, because of the immediate challenge of fighting inflation.
A significant part of the budget surplus set to come in at more than 17 billion dollars is expected to be put aside for spending on education and infrastructure.
Source: SBS staff and agencies
The economic forecaster says while the Rudd government kicked off its campaign in fine style last November, it has several tough decisions ahead.
It points to the $31 billion of tax cuts, bonuses for carers and seniors, more money for health and the Murray Darling Basin.
Baby bonus review
Meantime Finance Minister Lindsay Tanner says the tax cuts announced in the lead up to last year's election will insulate people on middle-to-high incomes from the impact of budget cuts.
He believes people on high incomes will be getting significant tax cuts, but says it's inevitable spending cuts to be announced in the federal budget will cause pain in various sectors of the community.
The baby bonus has also come under the spotlight in recent times, with Mr Tanner refusing to speculate on whether Tuesday night's budget will include means testing of the baby bonus.
The bonus rises to $5,000 on July 1, the same day the first roll out of Labor's promised $3 billion in tax cuts comes into effect.
Surplus targeted
The government is targeting a budget surplus of at least 1.5 per cent of gross domestic product (GDP), by cutting government spending to help fight against inflation.
While in Opposition, Labor earmarked $10 billion of cuts for the next four years, but also said it's aiming for another three or four billion dollars worth of cuts.
Mr Tanner told the media it's very important to get a balance, and the government doesn't want to go overboard.
Focus on education
Meanwhile the Rudd government says it's first budget will cut growth in real spending next fiscal year, but lay down a framework for infrastructure and education.
Treasurer Wayne Swan says the strategy is designed to respond to the immediate inflation crisis, but deliver on commitments to expand the nation's economic capacity.
It's been revealed the budget will contain 649 individual decisions on spending cuts, and re-prioritised spending initiatives.
The treasurer made it clear the measures to invest in skills and infrastructure will have to be phased in over time, because of the immediate challenge of fighting inflation.
A significant part of the budget surplus set to come in at more than 17 billion dollars is expected to be put aside for spending on education and infrastructure.
Source: SBS staff and agencies
